Dennis Carey Info.

In several articles written by Dennis Carey, the Sarbanes-Oxley Act of 2002 is mentioned. This legislation was initiated by U.S. lawmakers in response to the loss of confidence American investors were expressing at the time, in a fearful reminder of the Great Depression of the 1930’s. President George W. Bush signed the legislation almost exactly 8 years ago, on July 30, 2002, and within a short while was referred to as SOX.

To Be Continued…

Dennis Carey also points out that the contemporary trend for CEOs to stay in their position fewer years then the duration they were there in the past has added even more relevance to this corporate issue. Over the past several years the average length of a CEOs tenure decreased from about 8 years on average to even less than five years. Therefore, having a succession plan is an urgent issue that touches corporate life across the board.

Today boards discuss succession planning more than any other topic aside from making sure the current chief executive is the right one for the job. One probable reason that this subject is taken more seriously than it has been in the past is due to the provisions demanded by the groundbreaking Sarbanes-Oxley Act; the need to have “executive session” meetings, meaning that the board must meet without the executives present; the better to discuss their eventual replacement.

Dennis Carey, an expert on helping companies through the succession process, urges that boards make drawing up a succession plan part of the criteria for a boss’s pay. “Twice a year the board should ask the question, ‘Joe, if you were hit by a truck, who do you recommend should take over your role?’ The CEO should then write the name in a sealed envelope,” Dennis Carey continues, “in the eventuality of a truck-hitting incident.”

Continued…

In the past ten years the issue of executive succession has become ever more important. All too often large, successful companies find themselves in crisis mode when, for whatever reason, the CEO must depart from his position. If a company has no well-thought-out plan about how to react to the departure of its leader, the company can be left in a precariously vulnerable position, creating uncertainty which can affect the company’s value and its ability to function efficiently.

To Be Continued…